Blockchain 2.0, Smart Contracts and Challenges

The blockchain technology can change the way of redefining the transaction. Blockchain technology is used to transfer bitcoin & other digital assets across a peer-to-peer network. The blockchain technology is the great thing across industries from finance to retail to even healthcare.

Blockchain 2.0 has the mode of operation that moves from simple transactions to multiple transactions while previously, we had blockchain 1.0 which was public or private. This develops its reach and introduces network, domain-specific apart from the public and private while the blockchain 1.0 was limited to public only. Thus, the word Blockchain 2.0 gives people a better feeling than Blockchain 1.0.

Blockchain 1.0 was primarily a Bitcoin blockchain whereas Blockchain 2.0 has lots of different kinds of blockchains such as Ethereum, Corda, Hyperledger. There are also many others in the loop and in different stages of growth. Blockchain 2.0 arranges the entire state of economic, market, and financial applications which uses the blockchain that is more extensive than simple cash transactions like funds, bonds, prospects, loans, smart property, and smart contracts.

Smart Contracts
Smart contracts are computer protocols those install the terms and conditions of a contract. Usually, you would go to an advocate or an accountant, pay them, and wait while you get the document while with the smart contracts, you can simply drop a cryptocurrency like bitcoin or any other, into the ledger and your escrow, driver’s license, or whatever drops into your account. Moreover, the smart contracts can’t only define the rules and penalties around an agreement in the same way that any traditional contract does, but automatically execute those obligations as well.

The most genuine thing about the blockchain is that because it is a decentralized system that exists between all authorized parties so you don’t have to pay agents which saves your time and conflict as well. Blockchains have their problems, but they are considered, faster, cheaper, and more secure than traditional system that’s why the banks and governments are utilizing them.

The foremost profit of putting Smart Contracts in a blockchain is the conviction which is provided by the blockchain that the contract terms cannot be changed. The blockchain makes it difficult to hack the contract terms. By making available to use applications that function on planned conditions between the supplier and the customer, smart programs ensure secure escrow assistance in real time at almost zero cost.

The encryption of your websites is described as cryptography which keeps your documents secure. By smart contracts, you can save all your documents which mean that there is no danger of hacking. Smart contracts also save your money because ‘Smart Contract’ has not any need of Intermediary or agents. You don’t have to pay a notary to witness your transaction.

Normally, you waste a lot of hours in paperwork to process the documents manually. ‘Smart Contracts’ use software code to automate tasks and thereby cuts your many hours of time and also many business processes. Automated contracts are not only faster and cheaper but also avoid the errors that come from manually filling out piles of forms.

Smart Contracts are absolutely scalable since its growth provides ever more resources rather than driving it towards its overclocking. It also preserves resources like storage, energy and computing power, instead of wasting them on redundant replication. Not to mention generating massive amounts of heat on a warming planet.

Challenges
The problem with scalability is inherent to the distributed ledger. At this point, the model where each node executes a smart contract doesn’t seem to be scalable. It is considered that when the scale is involved, the best option is to split the bulk of tasks among separate networks.

The regulated industries like banking, financial services, and insurance sectors already are using this technology which is open to investigation by regulators so any move to a game-changing technology is likely to trigger further regulatory analysis and interruption. Regulators will need to consider what activities should be managed and who should be accountable for compliance. The key consideration for regulators will be setting a framework for participants to operate in, without any choking innovation.